Friday, February 23, 2024

EDITORIAL: Buhari’s controversial cash transfer policy

The National Economic Council on Thursday dumped former President Muhammadu Buhari’s national social register, opting for a new one to be developed by each state of the federation.

The council described the register under which over N3 trillion was distributed by the previous government as “a fraud, phantom, bogus and ambiguous.”

The NEC headed by Vice President Kashim Shettima, is made up of governors of the 36 states of the federation and the Central Bank of Nigeria.

The governors said the federal, state, and local governments would develop fresh registers to distribute “tax-free cash awards to ameliorate the sufferings of Nigerians.”

Poverty remains one of the world’s most challenging sustainable development goals to tackle. This problem is particularly critical in Sub-Saharan Africa where the extreme poverty headcount is rising, prompting governments in the region to accentuate poverty reduction efforts.

Historically, governments across the world have adopted different strategies to address extreme poverty, such as welfare programmes, financial aid, and access to credit facilities for poor households.

Often, the strategy adopted depends on the conceptualization of the cause of poverty—physiological or sociological. Physiological poverty explains poverty as the lack of basic needs such as income, food, clothing, and shelter.

Strategies focused on this conceptualization would aim to increase the income of the poor.

Sociological poverty is attributed to structural inequities such as laws that prevent the poor from accessing credit and agricultural lands. There is also the human capability concept which ascribes poverty to the lack of opportunities for the poor.

Conditional Cash Transfer policies follow a generalist approach to addressing the causes and the intensity of intergenerational poverty through the provision of financial support to poor and vulnerable households.

The use of conditional cash transfers in Nigeria was first adopted by the late Umaru Musa Yar’Adua administration in 2007, under the “Care of The People” (COPE) Conditional Cash Transfer (CCT) programme.

The programme aimed to reduce the “vulnerability of the core poor in the society against existing socioeconomic risk and to alleviate intergenerational poverty” in Nigeria.

Under the COPE programme, participating households received a cash transfer of N1, 500 per child up to a maximum of N5, 000 and an investment payment of N84, 000 or its equivalent in equipment to set up a petty business or trade.

The eligibility criteria for beneficiaries of the COPE programme were households in communities with low human development indicators— girl child school enrolment rate and adult literacy rate, households with at least one child not more than Junior secondary school age, and households headed by vulnerable persons, women, the elderly, and persons with disabilities.

The beneficiary selection process was overseen by the National Poverty Eradication Programme and the Office of the Senior Special Assistant to the President on the MDGs who worked in concert with local government officials and community leaders—village heads, school heads, and religious heads.

The main conditions for support were an 80 percent attendance record for school children in participating households and mandatory participation in government immunization programmes for children.

“As documented, in some cases, the selection of beneficiaries was based on loyalty and personal relationships with the community leaders”

Despite the shortcomings, during the COPE period, the poverty rate reduced from 47 percent in 2007 to 43.5 percent in 2010. Even with this reduction, the poverty rate was still high and remained around 40 percent in the years that followed under the Goodluck Jonathan Administration.

Against this backdrop of poverty and hardship faced by many households in Nigeria, President Muhammadu Buhari established a CCT programme as part of the broad 2016 Social Intervention Scheme, part of a key campaign promise to reduce poverty through robust social intervention.

Expanding on the COPE programme, the administration launched a new CCT to lift vulnerable households out of poverty under a joint social intervention programme with the World Bank.

The CCT programme was backed by a $1.3 billion funding commitment from the Nigerian government and a $500 million credit from the World Bank.

Under the Buhari’s CCT, beneficiaries received a monthly payment of N5, 000 from the government. The payment was made directly to the main caregiver of the household, typically the mother.

Furthermore, households received an additional N10, 000 if they had pregnant women and school children.

There were several surveys of CCT beneficiaries which indicated that it helped prevent malnutrition and improved the livelihood of the poorest households in Nigeria.

The former Minister of Humanitarian Affairs, Disaster Management and Social Development, Sadiya Umar Farouq, emphasized the success of the CCT stating in a press brief that since 2015, over 1 million households (7 million persons) had benefited.

However, looking at the overall data, the number of Nigerians in poverty increased from 40.1 percent in 2015 to 45 percent in 2023.
The data suggested that poor households were no better off compared to 2015.

There were several issues with the CCT programme under the Buhari administration.

First, was the amount of the cash transfer; beneficiaries acknowledged that the N5, 000 monthly payments was insufficient to make any significant change in their livelihoods.

There was also a lack of data on how the poorest and most vulnerable households were identified for inclusion in the social register.

The community targeting approach used merely relied on “subjective assessment,” which did not represent the household’s actual poverty level.

As documented, in some cases, the selection of beneficiaries was based on loyalty and personal relationships with the community leaders.

The programme also failed to publish data on its performance and the impact of the programme on beneficiaries.

The mere assertion of success based on the number of beneficiaries served and testimony of a few beneficiaries were not enough; the programme did not publish any data to prove how it helped to improve the livelihoods of the poorest households.

Publishing this data would have created the necessary public awareness, improve programme accountability, and engender public support.

The geographical spread of its beneficiaries also raised public concerns.

The figure showed more beneficiaries in the northern geo-political zones compared to other zones, with the South East having the lowest number of beneficiaries.

While this was plausible because a significant number (65 percent) of the extremely poor live in the northern region, there was still a suspicion of regional favoritism, especially when the total number of beneficiaries in Jigawa State was about 14 times more than the total beneficiaries in the whole of the South East region (five states).

This uneven spread in the geographical coverage of beneficiaries raised questions about how the beneficiaries were selected, the lack of specificity, and the need for the policy to publish an accurate account of its methodology for selecting beneficiaries.

Buhari’s social register lacked credibility because it failed to answer the two fundamental questions of WHO and WHERE in digital addressing.

Any social register by the states that fails to address the two issues would amount to fraud and hypocrisy. Nigeria must learn to address socio economic problems from the root.

For the Tinubu government to succeed in its new efforts to lift Nigerians out of poverty, the socio-economically vulnerable Nigerians must first be digitally identified and addressed as the foundation for compiling a reliable, confidence building integrity based social investment register.

This is the minimum condition precedent for a decent state government-driven petroleum subsidy removal palliative.

The NEC cannot condemn and discard Buhari’s national cash register as unreliable, lacking integrity and replicate the same at states’ level. That will amount to the pot painting the kettle black.

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